UK to overhaul infrastructure contracts, seek savings

LONDON, Dec 4 (Reuters) - British finance minister George

Osborne will overhaul the way the government handles

infrastructure procurement on Wednesday, a source familiar with

the matter said on Tuesday, and announce large savings on

existing contracts.

Osborne, under pressure to boost Britain's flagging economy

when he updates his economic forecasts on Wednesday, will demand

that the taxpayer has a board seat and a share in the profits of

companies taking on public-private infrastructure contracts.

He will also consider introducing competitions where

investors can bid for stakes in projects already underway.

Under pressure to find savings to get the

Conservative-Liberal Democrat coalition government's austerity

plan back on track, Osborne will say he has found 1.5 billion

pounds ($2.4 billion) in savings from about 100 existing

contracts in the last 18 months.

A further 1 billion pounds in efficiencies have been

identified, the source said, but gave no details of the time

frame for the savings.

Osborne could face higher government borrowing this year, a

major embarrassment for the Conservatives, who have put cutting

a record budget deficit at the heart of their economic policy.

A sluggish economy has played havoc with the government's

austerity targets since 2010 meaning Osborne may have to

announce further spending cuts or a longer period of fiscal

consolidation.

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